Operations

How To Reduce Party Bus Insurance Costs

When asked the question, “What are the Top 5 challenges concerning you?” in LCT’s 2015 annual June Fact Book industry survey, the No. 1 response was insurance rates. Judging from conversations at LCT trade shows and listening to operators’ voice concerns at association meetings across the country, that hasn’t changed. Insurance will no doubt be at the top of the list again.

Yes, rates are rising in what Paul Zizzo calls a “hard market.” Zizzo, the CEO of Melbourne, Fla.-based RRL Insurance-Acrisure Partners, says such a market is characterized by premium increases from all carriers. Further, Zizzo and other insurance brokers say the market is stiffening for party buses, notably those configured with perimeter seating, and especially those equipped with entertainment poles.

“When it comes to shuttle and party buses, perimeter seating and a dancing pole are becoming liability issues,” Zizzo says. “Party buses are top heavy and if 10 people in a 15-passenger bus are sitting on the left side and the driver makes a sharp left coming off an exit ramp, the bus could roll over. When you add in a pole, it becomes a red flag to insurers because you now have passengers dancing and moving around the bus.”

One interesting point Zizzo says causes insurance underwriters to scrutinize operators with multiple party buses is analytics. “The data has finally caught up to the industry. I remember my first LCT limo show back in 2000 when all you saw were stretches and sedans.

Today, the shows are full of shuttle vans, party buses and Sprinters. So now after 10 years, there is enough data and insurance carriers have all the tools and databases to examine party bus incidents and claims. In fact, one of the first questions I am asked by a carrier when seeking quotes for a party bus is, ‘Does it have a pole?’ That’s a red flag today.”

Diagnosis On The Medical Transport Business

Getting into the non-emergency medical transportation business may appear to be a steady source of revenue, but it may not be the right remedy for those who don’t know what they are getting into.

“That industry is very specific about insurance and not all carriers write it because it is a different class of transportation,” Zizzo says. “Because drivers are transporting people who are hurt, in wheelchairs, or stretchers, the driver has more liability because he must perform more tasks and ensure passengers are properly secured.

“There’s a lot more going on in the medical transport business than the traditional chauffeur business that requires drivers to help people who can’t help themselves, which can mean a lot more facets to a claim,” Zizzo says. He advises operators looking to get into the business to keep it separate from their limousine business, and start a separate company that only deals with medical transportation.

Adds St. Clair, “It’s tempting to want to get into the business because operators can see it as steady income, but the costs could outweigh the risks. Loading and unloading handicapped people requires another level of driver training and care. And Medicare, for example, doesn’t pay a lot.”